18
comments:

Anonymous
said...

Oh, bear is here alright. AUD is just damn ridiculus. It is time to bet China will disappoint. EUR is vulnerable. It is time to bet LTRO cannot save Portugal. SP500 is approaching 1350. It is time to bet today's NP is the last big data that surprises the upside.

Indeed TMM, Let us just say that the start of the year has been cold steel for the bears. I am peeved that I did not buy EM going out of 2011. We have seen one of the biggest reversals of capital flows in a decade into EM. And I have been left on the sidelines.

Of course, my longs are doing the job for me which they damn well should after having puked in the summer.

I would like to get bearish, but the pain trade it seems, from positioning, is still UP. A lot of bears out there getting caught in hibernation on this one.

as CV said, the pain trade is UP. What makes this rally different is that it is not a blowout and fade, but rather slow slog upwards with decreasing vol. People are more comfortable going long now , new year new targets and better economic backdrop.

Better yet, open up a chart and put a circle around all the gains in the US market that have come thanks to the futures being pushed up during the night when no one is looking.

This is from an article written in 2003:

"Heller had just left the Fed when he gave a speech suggesting that the central bank should step in and take direct action to keep the stock market from collapsing. The Fed had taken action before. It made sure there was enough liquidity during the crash of '87 to keep the system going. It may have even strong-armed a few banks into propping up the market. And it has often lowered interest rates at opportune times.

"But Heller's idea was different. He wanted a more direct approach, especially when the bond and currency markets were becoming uncontrollable [like they are these days]. Heller believed that in an emergency, the Fed should start buying stock index futures contracts until it managed to pull stocks out of their nosedive. Essentially, whenever there is heavy buying of these futures contracts it causes the underlying stock market to rise. The futures contracts can be bought cheaply; they are highly leveraged so you can get more bang for your buck, and they eliminate the need for a rigger to purchase, say, all 30 stocks that make up the Dow. Heller explained that the process was simple.

bears are licking the wounds but after the ups and downs of past 2 years, bulls gotta be a bit cautious too... as HF data still strong ppl will be looking forward to better data and earnings... JBTFD for now

wait, there are no dips (unless you call a 2 hour sell off on Monday a dip).. low vol == no opportunity to trade

Front end of Aussie curve is the only thing more manipulated by Voldemort than CNY. Sure its all looking super ugly there but there's no catalyst for the FX, its a nice hedge for more "value" carry trades though.

Front end Aussie more manipulated than CNY? might be a stretch there nemo, problem here is the lack of paper so positioning can really exacerbate moves. I suspect real money will get the opportunity to hoover up AUD paper if the property market and China ponzi go kaput. Conditional liabilities of backing up the big 4 and property market are mind numbing for the size of population and household debt / capita is already high. Of course you'd never get this talking to an Aussie, most of the Aussies in the markets have never experienced a recession and property downturn. Maybe it will continue to be the lucky country, forecasting is only for the wise and foolish economists. To paraphrase livermore, it's not our job to be on the bullish or bearish side but to be on the right side.

The camp site by the river was a happy place as winter ended, and each new set of visitors arrived in the glade on the edge of the forest. First came the bulls, ever vigilant and wary, eating quickly and voraciously, then moving on, leaving nothing behind. Then the herds of sheep arrived, grazing silently, apparently oblivious but with one eye open for coyotes, as the bears slumbered on in their lair.

Finally, in early Spring, the campers arrived, a cautious and respectful group at first, but then came the late arrivals, noisy and boisterous, carelessly spreading their food and trash across the forest floor. The bears stirred, and watched silently from the edge of the forest. The campers ate and drank and enjoyed a bacchanal, then finally fell asleep around the fire, with tents unguarded, and foodstuffs scattered freely. A few coyotes sniffed the air, and gathered around the camp site. The bears watched in silence, and waited.....